If we want to build a better future, where do we start?

In 1925, John Maynard Keynes shared his answer to that question in a letter to the British journalist Henry Noel Brailsford.

At the time, Keynes was deep in a technical work on the theory of money, but he was hoping soon to free himself to explore the ideal future state of society.

That would require, Keynes felt, a very different approach to the one he took when writing long economic tracts – he would need to start not with economics but with ethics.

The ideal future:

has to be tackled in the first instance from the ethical side rather than from the standpoint of technical economic efficiency. … What we need is a form of society which shall be ethically tolerable and economically not intolerable.[i]

As we grapple with the transition to a new, digital form of capitalism  –  and emerge from a pandemic that has turbocharged that transition  – Keynes’ advice couldn’t be more timely. And it’s a helpful corrective to the way we tend to talk about big policy ideas.

When we discuss ideas to make the future better – big ideas like a mandatory living wage, or a four-day week, or a simpler, more universal welfare system – we always jump straight to issues of implementation.

We ask things like:

• Do we have enough money to pay for it today?
• Who would win and lose financially, compared to now?
• What do people say when we poll them on the idea?

These aren’t bad questions at all  – only the most naive idealist would think we don’t need to worry about fiscal sustainability, or work through the immediate distributional consequences of a new policy, or care about how the policy will land on day one.

What these questions don’t do, however, is help us assess whether the idea is a good one in the long run. They tell us how hard it would be to get there, not whether it’s a good destination to aim for.

At times like this in history, that’s a real blocker to progress. Because many of the problems we’re facing arise from deep structural forces that will take decades to reshape.

From the monopolies of big tech, to digital burnout and gig economy insecurity, to stratospheric inequality, these aren’t issues we’ll solve with incremental tweaks – they raise big questions about the kind of society and economy we want.

How we made progress before

If you consider history’s boldest policy ideas – the radical laws and institutions we used in the past to make our lives decisively better – you see how progress often started with ethics, not economics.

We didn’t ban child labour on the basis of a cost-benefit analysis, we did it because it was the right thing to do. And we didn’t introduce free education because we’d saved up £90 billion in the piggy bank, or because we’d identified offsetting increases in the horse tax or the window tax. We took progressive steps towards a far-off destination, and in the course of the journey a radically better future became attainable.

When the NHS was created, it was precisely this argument – between present-day accountants and aspirational future builders – that played out.

Chancellor Kingsley Wood played the role of the accountant. With World War II drawing to a close, and UK public debt set to soar past 200% of GDP, he said the Beveridge Plan was an ‘impracticable financial commitment’.

Beveridge and his supporters were, Wood felt, getting ahead of themselves, dreamily spending a post-crisis windfall that didn’t yet exist.

Many in this country have persuaded themselves that the cessation of hostilities will mark the opening of the Golden Age. However this may be, the time for declaring a dividend on the profits of the Golden Age is the time when those profits have been realised in fact, not merely in imagination.

The only prudent approach was to save up first  – or rather pay down our national debt  –  and then buy the future we wanted.

The case for the future builders was summed up well by Labour politician Herbert Morrison, who felt Wood had it all backwards.

The public is aware that the problem of deciding upon a scheme like the Beveridge Plan is not merely one of simple arithmetic. It is one of balancing risks and objectives against another.

Morrison’s argument wasn’t that money doesn’t matter. It was that you can’t assess game-changing ideas within the confines of the inherited policy and fiscal settlement. If you do, you’ll be paralysed, and the future will be forever out of reach.

As we know, and as the people instinctively feel, finance is within very wide limits a handmaid of policy.

The money should follow the vision, not the other way around.

Long before the coronavirus pandemic, it was clear we faced a challenge on a similar scale to the one faced by Beveridge’s generation.

Increasingly, it now seems our task is on a par with the one faced by the great Victorian social reformers  – people who, over two or three generations, reimagined the state for a new economic age.

Our question is the same as theirs but different: how do we govern industrialdigital capitalism to harness its potential for a better society?

We won’t find the answer to that question in the box of policies we were handed by our twentieth-century predecessors, just as we didn’t survive the shift to industrialism by tweaking medieval policy instruments.

Politics can feel pretty forlorn at a time of transition like this, but there are answers to the big policy challenges we face. We just have to follow Keynes’ advice: start from the kind of society we want – and work back from there.

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[i] I’ve taken this quote from Zachary D. Carter’s brilliant biography of Keynes, The Price of Peace

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James Plunkett is the author of End State: 9 ways society is broken — and how we can fix it, out now in hardback, Kindle and audiobook.